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Telework set to transform call centers

Feb 04, 20034 mins

* Faced with 200,000 jobs lost to India, industry seeks new ways to compete

It’s ironic; everyone’s teleworking – or, rather, they’re just working, albeit at home – but the corporate telework industry is in the dumps. Equally ironic: Most big companies aren’t spending on launching or expanding telework or hoteling programs because they’re spending on security technology so employees (who are not teleworkers, mind you) can remotely access the network safely. In-Stat/MDR’s latest report predicts the network security market will grow from $2.1 billion in 2001 to $5.8 billion by 2006, with the firewall/VPN segment representing the biggest chunk.

Know what this means? Companies are being forced to support the bottom-up, grassroots, work-from-anywhere way of life without benefiting from any top-down cost savings from shedding office space. Sun CEO Scott McNealy says Sun saves $150,000 per year ($10,000 per employee annually) by eliminating about half its office space. You’d think with all the evangelizing Sun and IBM do about the cost savings of hoteling, office parks would fall like dominoes. Yet most continue to sit half empty.

The call center industry, however, is beginning to get it. Call centers have always lost lots of money due to costly staff training and high turnover, which in turn has kept hourly wages low, which in turn attracts the least experienced and committed staffers, and around we go. But now call center managers are dealing with a new problem: overseas competition. According to DataMonitor, 200,000 call center jobs have been lost to India alone in past years. Hundreds of others are going to the Philippines (Linksys just built a call center there) and Canada. In Asia in particular, applicants are plentiful, college educated (commonly with computer science degrees) and will work for $5 per hour, even less. 

I just got back from the Call Center Demo Show/Southwest Telework Conference in Dallas, and boy, are the call center people excited about telework. A full day of sessions devoted to virtual call centers was packed, and show sponsors say it was the best-attended track of the four offered. I met several companies that offer virtual call center outsourcing services (ARO, Working Solutions, Alpine Access and Willow CSN), meaning a client uses the company’s call center agents to support its business or to augment an existing call center. This market is growing about 30% per year.

I also met folks from two health care companies – McKesson and SSM Healthcare – that have brick-and-mortar call centers where nurses support patients either by taking calls and answering questions, or by calling patients to make sure they’re taking their medication, etc. SSM Healthcare has already sent seven nurses home, and McKesson is gearing up to start. In the coming weeks in this column and in the Net.Worker section of Network World, we’ll discuss how virtual call center products work, the issues and challenges virtual call center managers face, and how they’re overcoming them. We’ll also follow along as McKesson and other companies implement virtual call center strategies.

 In the meantime, I’ll share some return on investment numbers from ARO. The company began as a 100-agent brick-and-mortar call center, then went completely virtual. As a result, ARO now saves $1 million per year in increased productivity, decreased turnover and training costs. Next week, we’ll talk about how ARO did it and get some insight from its CEO, Michael Amigoni.

In other business, this week marks the debut of “Digital Domicile,” Net.Worker’s newest column. Penned by In-Stat/MDR senior analyst Mike Wolf, “Digital Domicile” tracks the connected home market, providing analysis and hands-on testing of the products and services that are fast changing the way we work and play. “Digital Domicile” will run twice monthly (on the first and third Mondays) and appear online only at ( Please let us know what you think.